Government CRM | SaaSy is Savvy

One of the biggest growth areas in government IT (information technology) procurement of the last 5 years has been Constituent Relations Management (CRM) systems. Taking a cue from the private sector, government executives are increasingly sensitive to the need to improve their agency’s engagement and relationship with clients, and in this case, the citizenry. While CRM software systems were originally dismissed as an unwieldy fit for public agencies, thousands of local, state, federal and international governments have now avidly embraced the approach and realized the benefits. Although these not for profit entities don’t usually seek revenue or net income benefits as do commercial business, they clearly strive for a return on investment through increased public satisfaction, sustained efficiency gains, and cost reductions to name just a few of the benefits.

Now that CRM strategies and software systems are widely accepted in the public sector, and several companies have developed government specific software products aimed at public sector institutions, savvy decision makers have turned to the method of deployment in deciding what CRM software system and vendor relationship offers the best fit. "Client" or "client/server" software-based CRM technologies rose to a market share peak at the turn of the century. However, in the last five years it has become increasingly clear that the newest delivery method called "Software-as-a-Service" or SaaS increases time to benefits while lowering total cost of ownership (TCO). Sometimes also called "on-demand" or "hosted crm software", SaaS systems are delivered over the internet and accessed by an Internet browser from any location. Government is typically slower to shift to new technologies than the private sector. However, government is now seeking more on-demand vendors with modules tailored to its needs and because government is the world's largest buyer expect to see an increased number of SaaS business systems.

Much more than just a change in software technology, SaaS has brought fundamental changes in the procurement model, delivery model, implementation timeframe, IT resourcing, user adoption and costs of CRM systems in the following ways:

Procurement is based on a subscription pricing model. The pay as you go (or sometimes called the 'pay by the drink') subscription eliminates up front capital expenditures, dramatically reduces risk of implementation failure and creates a vested vendor relationship.

With no need to install new hardware or software, implementations are accelerated, cheaper and easier on the organization.

Software delivery is over the Internet offering anytime, anywhere access on demand by the user (hence the 'on-demand' moniker). Most SaaS CRM systems also provides ubiquitous wireless support for PDAs and mobile devices.

Software managementand support is handled by the vendor as part of the subscription fee, thereby foregoing the recurring expense associated with in-house IT resources.

User adoption is easier as staff are readily familiar its with browser-based user interfaces and Internet-like navigation.

One of the major challenges facing SaaS CRM providers has been related to securing data and meeting other specialized government requirements. Security is a major concern for government agencies keeping sensitive constituent data. Naturally, the public has a very high expectation that agencies will use every reasonable means to protect that information. To meet this need, SaaS providers have stepped up with extremely secure websites, encryption technologies, and other information security layered defense strategies. Recently, the Office of Management and Budget (OMB) issued its annual guidance to heads of federal agencies declaring that SaaS deployments can be used provided they meet the necessary security controls and standards of the Federal Information Security Management Act (FISMA). If looking at a SaaS business software system, verify early that it is FISMA (199) and NIST (Certification and Accreditation) certified. Also, verify that the business application is Section 508 certified, which is the government requirement to satisfy users with disabilities.

SaaS delivery also offers another great advantage by providing nearly unlimited growth potential and on-demand scalability. Hosted CRM solutions can immediately adjust to increased user counts simply by purchasing additional user seats. Since there is no need for advance procurement of hardware, software and bandwidth, there’s no lost capital expenditures if you end up not needing the hardware infrastructure and performance originally forecasted. There is also no need to continually upgrade and replenish hardware as new computing power makes old hardware obsolete long before its been fully depreciated. The SaaS subscription pricing method also makes variable and unpredictable expenses become predictable as fixed monthly expenditures. Budgeting becomes that much easier and more flexible and cost-savings can be accurately forecasted.

There are other cost-savings as well. According to CRM expert Evan Smith, "SaaS generally results in reduced ongoing labor costs. In a hosted environment, costs for support staff (such as the DBA, SysAdmin, Helpdesk operators and network technicians) are born by the SaaS provider and spread over multiple client networks, thereby saving recurring IT annual labor costs. Hosting also eliminates the recruiting, hiring, management, continued training and personnel issues with these IT labor staff. Ever increasing and changing technologies make it extremely difficult for many agencies to staff the necessary professionals required to successfully operate an efficient CRM systems environment."

Now that the jury is in and CRM have proven the ability to realize substantive benefits to agencies and their constituents, decision-makers have to decide which delivery system makes the most sense for the public when evaluating vendors and products. Given that SaaS deployments removes operational distractions such as hiring, training and retraining staff; budgeting and committing front-end costs for software and hardware; perpetuating legacy technologies, and addressing behind-schedule or over-budget IT projects, the answer for a SaaS CRM system is popular with many government agencies. With a hosted, on-demand, SaaS solution, government executives can better focus on their mission, strategy and highest value added activities, without being distracted by IT issues. In the end, it looks like getting SaaSy is pretty savvy.